Congress appears poised to send to the White House legislation to promote tax relief and lending for small businesses. The bill, which is backed by the AIA, is likely to be the final major piece of legislation Congress approves before the November election.

The bill’s (H.R. 5297) centerpiece is a new $30 billion loan fund to provide capital investments to small community banks to increase small business lending. It also creates a State Small Business Credit Initiative to provide $1.5 billion in grants to state programs that help private lenders extend more credit to small businesses.

Baltimore architect Jim Determan, AIA, testified in support of the fund before the House Financial Services Committee last May, noting that “As banks have restricted lending, it has become increasingly difficult for firms to continue to make payroll and fulfill benefit obligations for their employees, let alone expand and pursue new projects. I have heard from many of my colleagues who have reported banks either restricting draws on their lines of credit or, in some extreme cases, calling in those lines.”

The legislation also provides $12 billion in tax incentives to help small businesses weather the economic crisis and other measures to increase lending, including several provisions long backed by the AIA and the building community. These include provisions to:

allow small businesses to carry back general business tax credits to offset their tax burdens from the previous five years;

raise the cap on small business loans to increase lending by $5 billion in the first year after enactment, and refinance commercial real estate debt into long-term, fixed-rate loans;

allow taxpayers to write off more of the cost of purchases for their business, such as equipment and machinery, in the year the purchase is made and provide incentives for restaurants and retail owners to make capital improvements to their properties; and

allow the self-employed including sole practitioners, to deduct health insurance costs for purposes of paying the self-employment tax.

The Senate approved the small business bill on Sept. 16 on a 61-38 vote. The House is expected to approve the Senate version, unchanged, later today.

During debate on the bill, Senators tried and failed to repeal a provision of the health care reform law that requires businesses to file a 1099 report to the IRS for each vendor that they have paid more than $600 total in a tax year. Sen. Mike Johanns (R-NE) offered an amendment, backed by the AIA and hundreds of business groups, to repeal the provision entirely. However, it failed to receive the 60 votes needed for passage because of objections over how the repeal was paid for, by limiting the extent of the individual insurance mandate in the 2010 health care law.

Senators also rejected an amendment by Sen. Bill Nelson (D-FL) which would have shrunk the size of the new requirement but did not repeal it. The AIA and its allies are continuing working to build support for a full repeal of the provision.

Senate Finance Committee Chairman Max Baucus (D-MT) introduced a new version of his tax extenders package last week. Notably, this most recent package omits the payroll tax increase on architecture and other professional services S corporations previously included in earlier versions of the extenders package.

The previously-proposed revenue-raising measure would subject earnings by professional services S corporations to increased payroll taxes “if 80 percent or more of the gross income of such business is attributable to service of [three] or fewer shareholders.” Although supporters of the provision argue that it would close a loophole that allows some S corporations to avoid paying payroll taxes, the AIA and other professional associations have argued that it would punish small, service-oriented businesses around the nation that follow the rules.

With its omission from Baucus’ extenders package, it appears that the S-corporation provision, in its current form, is dead for the year. However, the AIA is continuing to work with its allies to ensure future provisions targeting S-corporation tax avoidance only affect those who are purposely avoiding payroll taxes while protecting tax-compliant organizations.

Baucus attempted to attach his extenders package to the Senate’s small business bill, but his motion did not receive the unanimous support it needed to be debated.

The Office of Design and Construction in the Public Buildings Service of the U.S. General Services Administration has made recommendations for improving Design Excellence design-build projects following a roundtable convened at AIA headquarters in Washington.

The Office released a white paper reviewing the outcomes from the industry roundtable and recommending that:

the Office of the Chief Architect should establish a Design-Build/Design Excellence Advisory Committee that will create policies and procedures for best practices;

GSA should monitor the ongoing projects, and document their successes and failures; and

Roundtable was initiated as a result of concerns expressed by the AIA about existing obstacles related to the federal procurement of architectural services – particularly those regarding four recent design-build procurements funded by the American Recovery and Reinvestment Act (ARRA) stimulus program. Because these projects were funded by ARRA, the design and construction services needed to be fully contracted before the end of fiscal year 2010 (September 30, 2010), so GSA used a design-build/Design Excellence hybrid model in hopes of speeding up the process. Subsequently, AIA leaders expressed their concerns to GSA regarding cost impediments to bid, onerous documentation and materials, and the inconsistent effectiveness of pre-proposal meetings and review workshops.

The Design-Build/Design Excellence Industry Roundtable sprung from those meeting, with over 80 professionals – including those architects and design-build contractors who competed and were short-listed for the four ARRA projects, the peer professionals who sat on the evaluation boards, as well as representatives from the GSA (procurement representatives, contracting officers, project managers, and others) and the AIA – participating. GSA has already begun implementing some of these recommendations and plans to issue additional guidance.

At the 2010 annual SGN meeting in this past February, members asked for an opportunity to continue discussions on some topics that they believe needed more in-depth review. Consequently, AIA’s State Relations team responded to this by developing a monthly call forum, the first of which was held August 31.

The calls will follow the same format each month. A WebEx-based conference call/webinar will be held the last Tuesday of the month from 3:30 to 4:30 Eastern time. Panelists will begin the call with short presentations pointing out a possible emerging trend during the first 20 minutes. Then, the discussion will be opened up to the callers for further comment and questions. At the end of each call, we recap the discussion and determine the resources needed to assist the state components in the future on the related topic. After each call, the State Relations team will be updating (or, in some cases, creating) related resources and making them accessible to members and components through our website.

The next call will be on stock school plans. State Relations is working with the Committee on Architecture in Education, one of the AIA’s long-standing Knowledge Communities, to offer this call. Panelists are:

Peter Lippman, Assoc. AIA, from AIA New York;

Jim Determan, AIA, AIA Maryland; and

Scott Powell, AIA, AIA South Carolina.

These calls are open to any member who would like to participate. If there is a topic you would like to have considered for review, please contact Mark Wills, manager, State Issues and Programs.

Citizen Architects on the Move

In recent weeks, three AIA members have found particular success in becoming civically engaged. Two architects in Massachusetts won their respective primary elections for seats in the state’s House of Representatives, with another being appointed to prominent city leadership panels in Los Angeles.

Greg Neffinger, AIA, won the Republican primary for the Massachusetts House seat representing the Sixth Hampden District, which includes Chicopee, Springfield and West Springfield. He will be facing Michael J. Finn in the statewide election on November 2. They are both vying for the seat being vacated by Rep. James Welch,who won the Democratic nomination for an open state senate seat.

Elsewhere in the Bay State, Chris Walsh, AIA, won the Democratic primary election in the Sixth Middlesex House District, which covers Framingham. With this win, he unseated incumbent State Rep. Pam Richardson. Walsh also is the current president of AIA Central Massachusetts.

“These are huge victories positive steps forward for our profession in terms of our representation on Beacon Hill”, said John Nunnari, Assoc. AIA, Boston Society of Architects and AIA Massachusetts Public Policy Director.

On the West Coast, Hraztan Zeitlian, AIA, was inducted to the Los Angeles Business Council (LABC) Board of Directors and appointed to Mayor Antonio Villaraigosa’s Design Advisory Panel (MDAP). Hraztan joins an elite group of the city’s most talented architects, urban designers, landscape architects, and artists who will meet several times a year to review notable capital projects in Los Angeles, while on the LABC board, Hraztan will create policies for a variety of critical issues facing the council.

It is especially important for architects to become involved in their communities during this critical time for the profession, and the AIA congratulates these members.

With the recent completion of the 2010 International Green Construction Code (IGCC) Public Comment Hearings, the ICC is now moving into the next step in the development of the IGCC – a full cycle of ICC Code Development in 2011. They have posted a Call for Committee for the 2011 IGCC Code Committee on their website with an application deadline of October 1, 2010. The second version of the draft IGCC reflecting the decisions of the recent hearings will be available in November.

As a founding partner in the development of the IGCC, AIA will continue to be an integral part of the process, and encourage our members to apply for seats on the IGCC code development committee. The AIA is committed to representing the best interests of our members and will in particular be carefully examining and addressing the professional practice issues and concerns that arise out of the code as it becomes finalized and published for the first time in 2012. In particular, we encourage practicing architects who have a deep understanding of building science and its integration with all aspects of professional practice issues to apply.

The successful development of the IGCC will rely heavily on both a well-informed code development committee, and continued participation by AIA members in the public comment periods and hearings. AIA National will be submitting detailed public comments building on our work during the first public comment period, focusing in particular on prescriptive and performance energy requirements and professional practice issues linked with the administrative and commissioning chapters, as well as other areas of the code focused on comprehensive design solutions.

For more information on the IGCC development process, please contact Jessyca Henderson, AIA, director, Sustainability Advocacy.

For more information and guidance on advocating for adoption and implementation of the IGCC, click here.